Technology and start-ups are the ones to watch out for this year.
“The growth forecast looks positive, with the government of India drafting a new policy for start-ups, and initiatives like Digital India gaining momentum,” says BVR Mohan Reddy, the founder and executive chairman of the engineering services firm Cyient and the chairman of India’s National Association of Software and Services Companies (Nasscom).
“In my view, social media, mobility, analytics and the cloud will drive the next wave of growth for the Indian IT industry, aided further by start-ups.”
Digital India is a government initiative to increase internet connectivity in India.
Bhavin Turakhia, the founder and chief executive of the internet domain name registrar Directi, says that “the year ahead will see the coming-of-age of” online payment applications.
“India is on the path of becoming the world’s fastest-growing mobile app market, where start-ups, financial institutes and even traditional companies are doing their best to keep up with the fast-changing times,” said Mr Turakhia.
“Although the market has suffered in recent times because of considerable backlash against certain start-ups for layoffs, India will continue to grow as a start-up incubator.”
The number of internet users in India is estimated to have reached 402 million last year, up 49 per cent on the previous year, which meant that India surpassed the United States to the No 2 spot in terms of users behind China, according to a report by the internet and Mobile Association of India and IMRB International.
“Technology will drive the growth of the Indian economy,” says Ravitej Yadalam, the chief executive and founder of Pennyful.in, an online coupons and cashback company based in Bangalore. “With Make in India and other initiatives, several low-cost alternatives will soon be expected to hit the markets.
“Digital India will lead the way to the growth of the economy and the businesses in the country, he said.
“The online and e-commerce market in India can be expected to boom as more customers adopt online purchases as their primary medium of shopping,” he continued.
“Average consumer spending on websites will also increase as people make their purchases through various vendors and marketplaces.”
Funding in Indian start-ups is estimated to have grown by 125 per cent to US$4.9 billion last year from $2.2bn the previous year, according to a report by Nasscom and the consultant Zinnov.
The report forecasts that the number of start-ups in India will almost triple from between 4,200 and 4,400 last year to more than 12,000 by 2020.
More investment is set to flow into technology and start-ups this year, with increased interest expected from domestic and foreign investors, according to Mr Turakhia. The Indian online companies Infibeam and Matrimony.com have been given the green light to raise money from the capital markets and this year are expected to raise up to 4.5bn rupees (Dh25 million) and 3.5bn rupees, respectively.
“The focus on innovation is steadily increasing, with many software service majors actively looking at buying start-ups and technology companies,” says Ramesh Loganathan, the vice president and managing director of Progress India and the president of the Hyderabad Software Enterprise Association.
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